AKC News // Worst probably over says Nobel economist

The worst of the global economic crisis is probably over but any early recovery is unlikely due to massive debts worldwide, Nobel prize-winning economist Paul Krugman has said.

'I share the optimism that the worst is maybe over,' he said in a speech to an international finance forum in Seoul, South Korea.

Various indicators suggest the pace of the decline has eased, said Krugman, a professor of economics at Princeton University in the US.

He said credit was beginning to flow, supported by large interventions by the US Federal Reserve and other central banks to ease the stress on financial markets.

But Krugman said any talk of recovery was premature due to the massive over-leveraging of banks and excessive debt in the financial system and among households worldwide. He called for tighter government regulation of financial markets to prevent a repeat of the crisis.